Unilateral Trade Liberalization in the Melitz Model: A Note

In the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector. We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.

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Year of publication:	2012
Authors:	Felbermayr, Gabriel ; Jung, Benjamin
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 32.2012, 2, p. 1724-1730
Publisher:	AccessEcon
Subject:	Monopolistic Competition \| Heterogeneous Firms \| International Trade \| Trade Policy

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Extent:	application/pdf
Type of publication:	Article
Classification:	F1 - Trade ; R1 - General Regional Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011278704